BURGAS-ALEXANDROPOLI PIPELINE: GREEK REACTION TO

UNCLAS ATHENS 001156

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV ENRG GR
SUBJECT: BURGAS-ALEXANDROPOLI PIPELINE: GREEK REACTION TO
BULGARIAN CONSORTIUM RESTRUCTURING


1. (U) Summary: On May 3rd, Greek press sources reported that
the Bulgarian Government was withdrawing its interest from
the proposed Burgas-Alexandropoli Oil Pipeline (B-A),
touching off widespread media speculation that the entire
pipeline deal was in jeopardy. Additional press reports,
however, had Bulgarian Foreign Minister Kalfin and Greek
Foreign Minister Bakoyannis refuting these reports
completely. No one in the GoG has been able (or willing) to
answer any of our requests for additional information.
However, Naftemboriki, the most reliable of Greek economic
papers, reported that the GoB decision was not a signal that
it was getting out of the B-A pipeline, but only a reshuffle
of Bulgarian companies participating in the consortium slated
to build and operate the Bulgarian portion of the B-A. Post
attributes the Greek media hysteria surrounding this action
as attributable (in at least part) to Secretary Rice's recent
visit to the region and commentary on energy issues, since
many of the reports drew complicated (and specious)
connections between her visit and supposed Russian pressure
on Bulgaria to terminate the project. End Summary.

"Steadfast and Undiminishing"
--------------


2. (U) On May 3rd, Greek press sources reported that the
Bulgarian Government was withdrawing its interest from the
proposed Burgas-Alexandropoli Oil Pipeline (B-A),touching
off widespread media speculation that the entire pipeline
deal was in jeopardy. Additional press reports, however, had
Bulgarian Foreign Minister Kalfin and Greek Foreign Minister
Bakoyannis refuting these reports completely. At a private
meeting in Thessaloniki where regional leaders were attending
the SEECP Summit meeting, the Bulgarian FM met with the Greek
FM who reported that the Bulgarian interest in BA was
"steadfast and undiminishing." Greek PM Kostas Karamanlis and
Deputy FM Evripides Stylianides also met with their Bulgarian
counterparts in private meetings, who confirmed the GoB's
commitment to BA on every level.


3. (U) No one at the Greek MFA or Ministry of Development
(the two ministries involved in the B-A deal) has had any
additional information on this topic. Our sole source of
meaningful information has come from the generally reliable
daily economic paper, Naftemboriki, which reported this as an
issue between the GoB and private companies involved in a
consortium to build and operate the Bulgarian portion of the
B-A pipeline. According to this report, the GoB dissolved
the consortium in order to form a new one, with new members,
not because of any desire or intention of abandoning the
project.


4. (U) Comment: Embassy is inclined to believe that this
press frenzy in more related to the Secretary's recent visit
to Athens than to any substantive knowledge of or interest in
the B-A pipeline. It is unfortunate that the Greek media
continues to look for and create incredible linkages between
the Secretary's presence and any activity occurring in the
region. Post has no information to suggest any Russian
efforts to shut down the project, which is not surprising, as
the Russians will have at least 51 percent operating control
over the pipeline, which is destined to carry largely Russian
produced and/or contracted oil. The GoB's actions are
consistent with earlier rumors that the Bulgarian BA
consortium was having difficulty and that he GoB would be
seeking to replace them. To the best of post's knowledge,
this tempest in a teacup is another Greek media special. End
Comment.
Ries